Constructing a Fintech Adoption Index (FAI) for the GCC: An Empirical Assessment of Economic and Institutional Determinants

Abstract

This paper constructs a Fintech Adoption Index (FAI) for the Gulf Coop-eration Council (GCC) to assess the relative importance of economic and institutional determinants in shaping digital financial usage. While much of the fintech literature emphasizes infrastructure gaps in developing economies, GCC states exhibit high levels of digital penetration and financial capacity, making them a critical test case for alternative explanatory models. Using a composite, usage-weighted index derived from publicly available institu-tional data, this study evaluates cross-country variation in adoption levels and examines whether differences are driven primarily by supply-side in-frastructure or behavioral and institutional factors. The findings suggest that in high-income digital economies, infrastructure alone does not explain adoption disparities. Instead, institutional trust, regulatory clarity, and con-sumer usage patterns emerge as more significant determinants. By shifting analytical focus from capacity to behavior, this paper contributes to ongoing debates about fintech diffusion and offers policy-relevant insights for digitally advanced financial systems.